2.3 Political, administrative and territorial decentralisation reform During the first phase of the decentralisation reform in 2015, the Verkhovna Rada of Ukraine approved the Law “On Voluntary Consolidation of Territorial Communities”19, which outlined the procedures for consolidation of territorial communities on a voluntary basis. At the same time, the parliament approved amendments to the budget legislation. According to these amendments, the powers of rayon councils and rayon state administrations (elementary and secondary education, primary and secondary health care, social protection, housing and municipal utilities, local transportation and territorial planning) and the corresponding financial resources were devolved to village, town and city councils elected in the consolidated territorial communities and their executive bodies. In 2015 - 2019, a total of more than 4,700 communities got voluntarily consolidated creating 980 new territorial communities.20 In 2018, the parliament amended the law on community consolidation, whereby cities of oblast significance received an opportunity to voluntarily consolidate with the adjacent rural territorial communities. In this way, smaller territorial communities got an opportunity to become equal to cities of oblast significance in terms of their finance and scope of powers. Aiming at supporting consolidated territorial communities, the National Budget provided a subsidy in 2016 - 2019 for the development of their infrastructure. This subsidy was distributed among territorial communities depending on the number of rural population and the total area of the community. However, the increase in the amount of this subvention from UAH 1 billion (35 million Euros) in 2016 to UAH 2.1 billion (79 million Euros) in 2019 was not proportional to the growth in the number of consolidated territorial communities (159 in 2015 and 806 in 2018). 21 During 2014 - 2019, state support for local and
regional development (capital expenditures) significantly increased due to the increase of the amount of the subsidy for social and economic development, the National Regional Development Fund, introduction of a new subvention for construction, and maintenance and repairs of local roads. However, the distribution of these funds between regions took place on a case by case basis and was focused primarily on the rayon and oblast level. In 2020, a new phase of decentralisation reform started. On April 16, 2020, the Verkhovna Rada of Ukraine approved Law of Ukraine # 562-IX, which vested the Cabinet of Ministers with the powers to approve territories of territorial communities and designate their administrative centers. These territories will represent the basis for election of local government bodies at the basic level, such as: village, town and city councils and the relevant village, town and city mayors during the local elections on October 25, 2020. And already on June 12, 2020, the Cabinet of Ministers issued a directive to approve the territories of 1,470 territorial communities and their administrative centers including those on the occupied territories of the Donetsk and Luhansk oblasts, but not in the Autonomous Republic of Crimea. Prior to the reform, there were 11,250 territorial communities on these territories. On July 17, 2020, the Verkhovna Rada of Ukraine approved the Resolution on the formation of 136 new rayons embracing the territories of the “former” 490 rayons and 187 cities of oblast significance. The decision of the formation of the new rayons covers also the occupied territories of the Autonomous Republic of Crimea and the Donetsk and Luhansk oblasts. On July 16, 2020, the Verkhovna Rada of Ukraine significantly changed the election legislation, according to which local elections will take place on October 25, 2020 (Law of Ukraine “On Amendments to Certain Laws of Ukraine on Improving the Election Legislation” (# 3485). In particular, the law has introduced the following: - party system of elections in territorial
19 Law of Ukraine “On the Voluntary Consolidation of Territorial Communities” # 157-VIII of February 05, 2015 20 Monitoring of the decentralisation process and local government reform. MinRegion. January 10, 2020, Link. 21 Idem, According to the data of the State Treasury
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